Brazil’s sports minister, Aldo Rebelo, has acknowledged that his country’s 7-1 loss to Germany would leave a “deep scar” on the nation’s football psyche but said it could not be compared to the 1950 Maracanazo.

Rebelo, who was a key driver behind a congressional inquiry into the Brazilian Football Confederation and the way the game is run in 2001, called for an overhaul of facilities and coaching to improve the development of young players.

Although the heavy defeat would leave a lasting mark on Brazilian football, he said it should act as the catalyst for a wide-ranging overhaul of domestic football so fewer players left for Europe at a young age. Even in the under-15 side, many Brazilian players were already based abroad, he said.

“It will be a deep scar for our football. But the best attitude we should adopt is to analyse the root causes and long lasting causes of that disaster,” said Rebelo. “Learn the lessons, try to correct them and overcome these failings so this doesn’t happen again. So that Brazil can have a national squad with the status it should have in world football.”

Brazil’s domestic league has supplied the four most recent winners of the Copa Libertadores but has been scarred by hooliganism, falling attendances and the ongoing exodus of young players to Europe.

Last season, players conducted a series of protests under the banner of the Bom Senso FC (Common Sense) movement, calling for a reorganisation of the congested and confusing fixture calendar.

“We are discussing special legislation with the clubs to make their management more modern, taking on more responsibilities and commitment in terms of financial accountability and in terms of the calendar and the respect of the players,” said Rebelo. “We are already quite advanced in this. This effort should be done regardless of our defeat to Germany.”

He said that Brazil had to stop exporting its national talent at such a young age, with players only tending to return from Europe at the end of their careers.

“We should also do the utmost to increase the quality of the management of our clubs. Many critics have mentioned that we have problems that have to be faced,” he said. “We export prime material and import finished products in terms of football. We export our star players, not only those playing but those being prepared.”

Rebelo said the new legislation and the new training grounds built for the World Cup would help Brazil retain more homegrown talent.

“Our legislation makes it easy to export players abroad. We have the power in the hands of the entrepreneurs, the Europeans. They are experts in football services,” he said. “We export the raw material. It is easy to do because you package it and you send it. For football services you have to add management and infrastructure that we don’t have.”

He said the humiliation in Belo Horizonte could not be compared to the Maracanazo when Brazil lost a game against Uruguay that they only had to draw to lift the cup.

“That squad at the time was considered to be much better than what we have today. The 1950 squad was a constellation of star players. The defence was very good, the forwards were incredible players,” he said, running through some of the names.

Whereas he has previously described the 1950 defeat as a “national tragedy”, Rebelo said that following the draw against Mexico in the group stage and the narrow victory over Chile on penalties it “wasn’t a big surprise” that they lost to Germany.

But he said the manner of the 7-1 defeat was a “terrible blemish”. “It was an accident, but if you analyse the causes of the accident that’s a different story,” he said.

Rebelo said that what had impressed him most about the tournament, which has caused controversy because of its $11bn price tag at a time of anger over under-investment in public services, was the attitude of both Brazilian and overseas fans.

“I watched a few matches and felt very emotional. The big surprise was the Brazil v Germany match. We knew it would be difficult but we didn’t expect that kind of performance,” he said. “I’ll take with me the happy moments I had watching with my friends and at home. The happiness of the Brazilian supporters and having the World Cup in my country.”